Public Procurement in European Union - Coursework Example

EU Public Procurement affiliation Introduction The UNCITRAL Module Law is tasked with public procurement systems that give out rules, regulations, and guidelines for efficient procurement systems. The Module provides the legal basis where the public procurement is undertaken to provide remedies for suppliers and the methods that can be used in the procurement process for goods, works, or services. This essay analyses the balance value for money strikes with other objectives like transparency, integrity, and competition. The two methods of procurement used are discussed and looks at the reasons as to why they were selected. UNCITRAL Module Law The Law Module that deals with Public Procurement deals with principles and procedures that are purposed to achieve value for money and goes ahead to avoid any violations that may arise in the process of procurement. It promotes objectivity, participation, integrity, competition, and fairness for purposes of such goals and principles. It has other principles like the transparency that enables compliance that is visible to principles and procedures that have been confirmed. The Law Module for 2011 replaced the UNICITRAL 1994 Law Module that dealt with the Procurement of Goods, Services, and Construction. The previous law was an important international platform in matters of procumbent law reforms. The Commission in the year 2004 agreed that the 199 Law Module benefited due to new reflected practices especially those from electronic communications in matters of public procurement. This formed a basis for reforms for the Law Module where the 1994 procedures in its text have not been changed and has formed the foundation for its success. Procurement matters have discretionary decision-making processes that are undertaken by the government. All sectors and levels where the spending for procurement is represented by 10- 20 % of GDP and reaches 50 % of government spending in its totality. Procumbent involves risks of abuse and the size of the market where it establishes that losses may become significant. It also includes other related projects like infrastructure, health, and education that have an impact on the economy in one way or the other especially when it comes to development and performance1. Matter of acquiring value for money are considered as critical where the Law Module in response to such concerns by the enactment of the State in developing systems for procurement that avoid abuse and also acquire value for money. The law accepts it when the government purchasers take advantage of techniques in modern commercial activities like e-procurement and framework agreements in the maximization of value for money in the process of procurement. It has procedures that allow standard supply, emergency procurement, low-value procurement, and its simple, complexes, and large projects. This allows interaction between the government and potential suppliers in coming up with solutions with contractors. This is subject to transparency mechanisms in the promotion of competition a principle of objectivity. Action and decisions done in the procurement process re subject to challenged by the potential contractors and suppliers. The government purchaser has discretion when deciding conduct and purchases during the procurement and such discretion is subject to principles of international standards especially standards by the UN Convention that dealt with Corruption. The State can pursue policies of a domestic nature which able to do so due to the Law Module. Such policies include promoting economic development that is supported by SMEs especially when international commitment is allowed. It is prepared to support harmonization of the standard of international principles in procurement matters in the public. It takes into account WHO Agreement in transactions of procurement and EU Directives, Conventions against corruption and IFIs documents. It aims at assisting formulation by State in procurement law in modern times. Developing States and countries have economic that are in transition where they use the 1994 law and the law module that new uses the international standards that applies to all States and is considered as appropriate. In the international level, the legal instruments deal with different aspects of regulation that deal with public procurement. These include EU Directives, Conventions against corruption, and WTO agreements on procurement and policy papers. All these share similar objectives that include a value for money and avoidance of abuse and corruption. Procurement methods ways in which states use such systems for procurement in promoting the domestic industry2. The UNICITRAL is considered as unique due to its scope and purpose where it is a template for national public legislation for procurement. Its procedures must be in line with international standards but can apply to local issues and circumstances. It enables for solutions that are modern and innovative to procurement. It does not only provide for current procurement but also provides by for efficient procurement process and procedures used by contracting entities and institutions. Value for money and other Objectives This term refers to the acquisition of services or works and goods that are required by the government, and they must be on terms that are stipulated and available. Objective accounts for price and terms of selling the products, and its suitability to the government, and its ability of contractors to deliver the goods. Integrity3 is a term that represents the prevention of corruption that upholds confidence the public when it comes to systems of procurement. Objectives like transparency, competition, and discretion influence each other. Competition is considered as an efficient method that ensures procurement systems receive value for money that improves quality and efficiency for contractual systems. Efficiency in transparency influences integrity by positively where the procedural rules are clearly defined and are verified that reduces chances of corruptions. Transparency also affects value for money which the public to have more confidence in the system. Discretion limits costs and sometimes undermines because of risks of judgment in its errors become high. This places restrictions on the ability to uphold integrity due to conflict between transparency and discretion and restricts value or money. This shows that there needs to be a balance between value for money, transparency, and discretion. Public procurement4 is a government activity that includes the purchase of goods and services in carrying out its purpose. It is used as a term in European Union. Objectives of government activity, efficiency, free markets, fair treatment, equality, accountability, integrity, and value for money. In obtaining value for money especially in, the public and private sector there are differences arise in obtaining such an objective especially in tools used to implement such. In acquiring goods and works, it is more difficult in the public sector due to inefficiency that prejudices such objectives. The public sector sometimes faces bankruptcy and redundancy, and this affects value for money. Reliance on bidding that is formal competitive nature is not used by the private sector and such tools that deal with value for money. Elimination of corruption and having the international trade in opening up the procurement process support the objective of value for money. Such objectives deal with detraction practices for value for money like supporting domestic suppliers. Achieving value for money may conflict with other goods, and, therefore, a balance is needed to make the process appropriate for all parties involved5. There are instances where bids are received, and this poses a conflict between value for money and the equal treatment principle. The equal treatment would want the bid to be canceled but the value for money principle would accept it as it would make the procurement entity to achieve value for money. Rules that prevent corruption like a limit to discretion by institutions and entities that avoid abuse and favouritism is considered to curtail discretion.6 Achieving Value for money and the principle of integrity have a connection in the procumbent process. Contracts issued by corruptions and bribes curtail value for money. This shows that where there is corruption bids are given to less qualified firms. This deters future bids by such qualified firms. If corruption is reduced, value for money increases, governments are required to follow strict rules of highest standards. Due to isolation the public procurements systems have integrated principles of the open market. This allows member states and entities to implement their public procurement systems to the competition. Liberalization of trade is controversial issues where developing countries fear that such moves of an open market will crush domestic markets due to the competition. However, opening procurement markets give value for money, goods, and services gain access. Member states benefit due to open markets by foreigners. Such procurement individual benefits must be identified to foreign contractors that are provided by domestic regulations7. Procurement of high value and complex construction projects The possible method to use in such procurement would be open tendering. This is due to its high value of the process of procurement and there is need to achieve value for money and not waste resources in the public. This method places transparency principle on a very high standard. It asks tenders for proposals on how projects will be approached and ensuring quality is met. Article 28(1) stipulates that unless article 29 to 31, the entities shall use open tendering. Article 10 of the Module law deals with the specification in the tendering process. Article 43 (2) (c) establishes that the tender is considered responsive if all requirements conform to the tender documents for solicitation. Article 43 (1)(b) establishes that the procuring entity is responsive if it has minor deviations that do not change the materiality of the tender in terms, conditions, characteristics and any set of requirements in the documents. When specifications are considered as unlawful then the procuring entity using European Union law, must re-issue under lawful forms the specifications. Article 19 of the Law Module enables such entities to cancel procurement on such issues before the offer is accepted. If uncertainty is left if the offer is accepted amounts to the rules violation. However, if the specification are considered lawful, the entity may proceed with the procurement. For purposes of achieving value for money the entity for procuring must define its performance theirs of its requirement. In term of quality, there are practical considerations for open tendering is acceptable of low bids in competition even though they may not achieve value for money. Considerations should be given to allowing other bidders offer other materials and comply with the Module of law in the tendering process in terms of specification. The 1994 Module Law used this as a default method for goods and construction. It also referred to this method as tendering but it has been renamed to open tendering in the 2011 Module law in both national and international procurement rules. Article 33 and 18(2) provide that a public notice for advertisement is a requirement in the procurement. It also needs specifications, and the process must be in writing and be signed in a sealed envelope in accordance with Article 40 (2). Pre-qualification proceedings by the procuring entity are allowed if it is necessary and appropriate. It limits tenders of those who meet the requirements for the suppliers. The UNCITRAL provides this method as a rule since they are viewed as presumptively superior to other procurement methods that are less adequate in fulfilling objectives in the process of procurement. Such objectives include equal access to opportunities, transparency, and competition. In ensuring advantages of this method, are only lost when necessary where other methods are safeguarded. This includes approval of additional organ that is independent that prevents abuse and ensures sound decisions are made. This promotes decision-making processes that are consistent that promotes capacity building through receiving feedback from suppliers and interested parties. Hierarchal approval is optional in the Module law in terms of the request for proposals for dialogue. It also allows the inclusion of a statement in procumbent where Article 28(3), where records must be, presented8. These guards against abuse and errors of commercial judgment especially in audits. There is also the publication of notice before solicitation of tenders. This creates awareness in the interested parties and provides chances to challenge anything through legal and political methods by interested parties and suppliers. The reason for choosing the open tendering method is because it has no favor’s where anyone can apply for the tender and promotes high competition when it a competition to the issue of pricing. It allows new firms to be able to enter the market that increase employment and creates new experiences like the use of new technology. The method helps the contracts to be able to grow and acquire new clients. However, it has a few limitations when it come to time spent and also open tendering inexperienced firms can apply which requires high evaluation and offers unrealistic competition. This method is most preferred in such a scenario for acquiring goods and infrastructure works that follow established guidelines in public procurement and the bidding documents9. It fosters efficient competition that adds value for money. It avoids work to be restricted to similar names where other persons that are qualified can acquire the opportunity that benefits them. These methods promote the principle of transparency due to its publicized nature and maximize quality due to many applications from vendors. Therefore, it is clear that this method of public procurements promotes the principle of the Model of law and the especially principle of transparency and equal treatment for all suppliers and tenders. This method also increases value for money, and it creates a platform for competition that is another principle under the Module of law. Procurement of goods, works, and services that are required urgently Another procedure that applies to such procurements is the competitive negotiations. This procurement method speeds up the process. The UNCITRAL Model of law in Article 30(4) stipulates that the competitive negotiations are made available especially where there are urgent needs for services, and open tendering proceedings are engaged. This method applies only when factors that give rise to urgency are not foreseeable by the entity in procurement or due to dilatory behavior on their part. Article 30(4) (2) of the Module law states that if the two requirements are not met due to weakness and delay in dealing with it and attention is gathered to its storm and brings urgency is not viewed as enforceable. The competitive negotiations method can be available if the urgency cannot us open tendering proceedings and other methods of competition due to events that are catastrophic The Module law in Article 43(2) (a) rejects non-responsive tenders where article 43(1) (a) establishes that responsive tenders if they comply with tenders documents in the solicitation. Under the 1994 Model Law, it was compiled with two-stage tendering and request for proposals with cases of failed open tendering and cases with no specifications. Since viewed that there lacked justification in this method unlike other methods of competition. It being a less transparent and competitive alternative serves more than single-source procumbent where entities have recourse to such a method. This method lacks hierarchical approval especially when direct solicitation applies, for protecting interests notice is required to suppliers as provided under Article 34(5) and 51. Such entities are not obliged to publish such a notice. Article 51 governs conduct in the competitive negotiations methods. A public solicitation has no requirement of offer where it is only designed for urgent situations. It includes negotiation with a number of firms by the procuring entity in promoting efficient competition. There is no set out formal structure in the Model Law in terms of proposals with dialogues were there are no requirements set. When final offers are issued the procuring entity choices, the best offer in accordance with Article 51(5). The competitive negotiation has factors like lowest bid plays a key role in the selection process where there are guidelines that require the government to justify its decision on choosing someone as regards to choosing the known bidder where the low bidder is always at an advantage10.This method is used in the European Union for the award of complete contracts where the government lacks capabilities in arriving at technical and commercial details in the process of procurement. There always discussions with potential bidders and is driven by EU core vision and objectives in the European market. The reason for using this method in such a scenario is that it achieves highly value for money for the State in its negotiations where procedures involve risks of unequal discussions and transmission that is unauthorized off bid information where it is enforced through contractual oversight that is very strong. Its methods assist USA and the EU to the point of accountability in the process of public procurement where there lacks room for vertical and horizontal approvals in the government and outside in information flows11. Suppliers Remedies Supplier’s lots are used as procurement tools in the private and public sector. The Module laws of 1994 specific form fail to address the suppliers lists position.12 The article also shows the proposals for reforms in rules of supplier list under WTO and GPA and entities of the European Union Directives of 2004/17. Article 9(4) prohibits impositions by entities on procedure and requirements with qualifications in Article 6. The law does not allow institution in using advertisement of supplier lists for procurement. The supplier review system is a mechanism that is formal where parties in public procurement can issue complaints in regards to non-compliance with rules in public procurement. It creates an opportunity for aggrieved parties in submitting their complaints form entities. A supplier can bring legal proceedings to judicial bodies where they can get extensive remedies in addressing violations in public procurement. It promotes the principle of transparency in the process where it offers benefits of correcting abuses but sometimes it is faced with difficulties. It provides for the supplier review system that outlines proper functioning of the system by creating confidence in the public regarding the system13. This creates flexibility to member states in organization of the evaluation system in consideration of legal and constitutional traditions. Aggrieved suppliers usually forward their cases to an administrative review. This hierarchy promotes quick dispute resolutions that are not interfered with the procurement process. The generic court also can review cases especially against the state. Initial challenges are where a complaint is brought before the court. In addition, complaints can be brought to an independent body and before a court for judicial review. The first stage deals with procuring entity review. It involves rules in limits and suspension for such complaints that are in the formal state. It also requires written reasons and decisions14. This process has advantages when it comes to efficiency in dispute settlement. The Module law creates a platform for connecting wrong decisions without disruption. Complaints are settled between the supplier and the procuring entity. The supplier after the complaint acquires new procurement processes Independence might lack and impartiality that creates problems where it is a compulsory first step in the review15. The process can be an obstacle in terms of review. Even though, the procuring entity review is beneficial. It also depends on whether the entity can handle complaints and corrects its decisions that are wrongful. Complaints about review may also be forwarded to, and independent body that serves as the first instance body in proceedings suppliers is tasked in choosing such. However, states are not obliged to set up such bodies. The Module of law does not define in an independent body, but it means the independence from a procuring entity as compared to independence from the government. Review by a court where complements are taken for the sole forum and as an alternative to challenging the possibility for suppliers to use16. Claims or suffered loss due to non-compliance with action and decisions. Article 63(1) provides that a contractor and supplier who have suffered loss due to non-compliance with citation and decisions of a procuring entity be allowed to challenge actions and decisions. Certainty in proceedings imposes time limits for challenges brought by suppliers17. Delays are problematic in the system therefore cases should be heard quickly to avoid the procurement process to proceed. This would deprive the challenger their right to remedies. The Issue of suspension may arise if suspended it may delay important rejects and if not suspended the contract can be concluded thus creating a lack of efficiency. This means that cases should be considered quickly where long delays might render irrelevance in practice. Suspension stays until the challenge has been decided, and notification given to parties’18. The procuring entity may apply for an automatic suspension where it is applied to an independent body or in a court of law.19. The procuring entity exercises discretion in suspension matters in proceeding when a challenge is being heard. Article 63(3) requires a decision in suspension to be made within their working days. The law does not regulate how such discretion is to be exercised. In an independent body, the suspension applies to decisions made before the deadline for submissions20. Such proceedings are suspended for a period of 10 days, and it deals with a challenge brought after submission deadlines and where there is no application of a standstill. When it comes to violations there, remedies offered apart from damages. Sometimes due to the sensitivity of interfering with the process, some review bodies refuse to review it and sometimes decide only whether the rules have been broken. The procuring entity can correct or uphold decisions in procurement proceedings Measures issued can be rectified in the proceedings to be in line with the laws of procurement and other rules21. The proceedings might be commencing after cancelation especially if the unlawful specification was applied. The Model law does not stimulate dealing with factors and, therefore, the review bodies practice discretion. Issues of damages and compensation are not outlined but under the interdependence review body the Model law22. Article 67(9) applies to remedies in an interdependent review body where it may declare legal rules as appropriate or prohibit the procuring entity in using decisions that violate the law. It may require the procuring entity to make a decision to correct such wrongs. It can also overturn decisions of such entities that are in violation of the law and can revise such decisions in accordance with the law. It can confirm or dismiss decisions and application. The independent body can overturn an award of the contract and require compensation to be paid to the suppliers and take alternatives actions. Considerations are given whether suppliers can obtain damages due to violations and how they are to be calculated. The Module law does not give an outline of damages in the procuring entity review. States are given the option to limit damages to costs especially for loss of profit and lost reputation. The most desirable remedy is the corrective action that is reflected in WTO GPA23. Where contracts have been concluded where the court can decide either to annul or cancel such a contract that can be prejudicial to firms intervals in balancing interests of the public and suppliers interests. The court deals with such issues of remedies before contracts are concluded. These include setting time limits before contracts are concluded and also applying a standstill period before the conclusion is complete. The court can prohibit entry into force and issuing possibility of suspension of the procurement proceedings that prevents any steps are taken after the challenge is made. Conclusion The essay has analyzed the guideline of UNCITRAL Module law that provides for guideline and rule for the objective of the public procurement process. The law tries to strike a balance between value for money and another objective like transparency and completion. This essay has looked at two-procurement systems method that is the open tendering and the competitive negotiation method. The open tendering was used in the procurement process for goods and construction works, and the competitive negotiations were used in the procurement process for good urgently required. Value for money and other objectives creates a conflict with another objective of equal treatment and transparency. When it comes to issues of delay in contracting parties, the court can decide that the procurement must continue due to its value it adds to affirm. This creates a conflict of unequal treatment where delayed process are supposed to be removed or suspended. Therefore according to the analysis the law tries to strike a balance between ensuring value for money is not lost and also ensuring that such objective are implemented and safeguarded accordingly. The open tendering methods of public procurement was chosen because it applies effectively to construction works due to its high value and give the best value for money. It allows anyone to apply for the tender, and these create a platform for efficiency and promote the principle of transparency. The competitive negotiation was used for the procurement of good urgently required since it allows for the best value of money and promotes accountability. The essay also analyzed the supplier remedies where there are remedied like suspension, annulment often public procurement tenders or their cancelation. All this remedies are established under the appropriate Module laws in the UNCITRAL. There are also remedies of compensation in regards to the cost incurred by aggrieved parties also damaged are offered. Such complaints and grievances are issued to the procuring entities an independent body and the courts of law. Any party who feel aggrieved has the right to make complaints to the places especially aggrieved suppliers and entities or individuals. However, in making such complaints, aggrieved parties must avoid delaying their cases where the law may cancel their complaints and this will cause them not acquire efficient remedies as required. References Books and Articles A. Beviglia-Zampetti, “The UNCITRAL Model Law on Procurement of Goods, Albano, Gian Luigi, and Roberto Zampino. VThe Integrity of Centralized Procurement Processes in Italy: What Do Data about the Management of National Frame Contracts Tell Us? V. Consip Working Paper, Rome, Italy, 2011. Albano, Gian Luigi, Berardino Cesi, and Alberto Iozzi. "Public Procurement Contracts with Unverifiable Quality: The Case for Discretionary Competitive Procedures." Albano, Gian-Luigi, et al. "Procurement Contracting Stategies." Available at SSRN 908220 (2006). Ancarini, “Service Sourcing”, chapter 9 in K. V. Thai (ed.), International Arney, Leslie, et al. "Strategic contracting practices to improve procurement of health commodities." 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